What changed?

[wasp]

Back in the early 90's I was too young to really comprehend the problem and was 12'000 miles away but for those of you who do remember....

What changed and how could you notice the economy coming back on track?

 

[barjon]

Back in the early 90's I was too young to really comprehend the problem and was 12'000 miles away but for those of you who do remember....

What changed and how could you notice the economy coming back on track?

Ah, waspy - it was that wonderful long legged doji on the four week time frame that started it all :cheesy:

good trading

jon

ps: good to see you around again

 

[wasp]

Ah, waspy - it was that wonderful long legged doji on the four week time frame that started it all :cheesy:

Nice chart... Any other things you noticed, other than the charts? I realise its not one thing that causes it like a recession starting but there must be signs? I just don't want to be buying a new place too soon!

ps: good to see you around again

I won't be for long if you don't get rid of those finotec ads. They make everything take 5 minutes to load

 

[barjon]

............... I just don't want to be buying a new place too soon!............

..........I won't be for long if you don't get rid of those finotec ads. They make everything take 5 minutes to load ..........

wasp

Depends where you're buying - London and South East usually pick up first then about a three month time-lag before it begins elsewhere (aside from a few hot spots).

Oh, is it those ads causing it - better report back.

good trading

jon

 

[MrGecko]

there is a definate correlation between the length of womens' skirts and the health of the economy - short skirts => good times; long skirts => bad times.

Seriously, I'm not making this up.

(that's my excuse anyway )

 

[GloballyRelaxed]

Buggered if you live in Siberia then...........

 

[JTrader]

Nice chart... Any other things you noticed, other than the charts? I realise its not one thing that causes it like a recession starting but there must be signs? I just don't want to be buying a new place too soon!





I won't be for long if you don't get rid of those finotec ads. They make everything take 5 minutes to load

I could be completely wrong in my understanding but -

Doesn't the govt. need to admit that inflation is actually a lot higher than they would have us believe (3% - yeah, right!), and then raise interest rates to counter the spiralling inflation.
The raised interest rates will see house prices fall more. If we avoid a full depression and interest rates stay below 10%, once interest rates peak, and then begin falling again, I'd reckon this would be the optimum time to buy. But who can say whether such a dip in interest rates will see a reversal......In 1998-99, interest rates were around 9% (nationwide BS anyway), the fall in interest rates led to the house prices taking off up....

 

[wasp]

I could be completely wrong in my understanding but -

Doesn't the govt. need to admit that inflation is actually a lot higher than they would have us believe (3% - yeah, right!), and then raise interest rates to counter the spiralling inflation.
The raised interest rates will see house prices fall more. If we avoid a full depression and interest rates stay below 10%, once interest rates peak, and then begin falling again, I'd reckon this would be the optimum time to buy. But who can say whether such a dip in interest rates will see a reversal......In 1998-99, interest rates were around 9% (nationwide BS anyway), the fall in interest rates led to the house prices taking off up....

So, it sounds like simply, we all perish till the government steps in, admits we are in dire circumstances and has to make changes to alter direction.

Is this all down to Brown/Darling or have we got to wait for Bush *cough*, yeah right!, I mean Obama/McCain to rectify the US first as we can't seem t do anything without them telling us what to do?

Excuse my ignorance here but I moved to Hong Kong in 1992 and didn't return till 1998 so missed it all.

Why don't we do something now or is it the longer we wait, the lower prices will be meaning life will become easier for first time buyers and house prices/life prices will come back in line again and basically re adjusting the stupid high prices over and beyond the wages non traders were receiving?

 

[hornblower]

Back in the early 90's I was too young to really comprehend the problem and was 12'000 miles away but for those of you who do remember....

What changed and how could you notice the economy coming back on track?

I read somewhere that its a 18 year cycle
14 years of stable or rising prices , and 4 years of recession
its all to do with land prices the price of land gets so high people cannot afford to pay the price
I have always found that, when every one is getting in ,thats the time to be getting out

 

[wasp]

So it is an essential adjustment to the economy to stop things getting out of hand as they were.

Now its just a case of watching / waiting / looking for clues that our illustrious government are making the much needed changes when prices get lower enough.

Did anyne notice life changing and hinting to this last time around...? ie, underneath of bridges over flowing with cardboard boxes... White label whisky prices topping out...?!

 

[hornblower]

Your looking for a sign
well , when things a getting good ,
the banks are giveing us all an unbrella
when we are haveing problems, and its pissing it down with rain
they take the umbrella away

its all to do with the banks and lending

 

[wasp]

Your looking for a sign
well , when things a getting good ,
the banks are giveing us all an unbrella
when we are haveing problems, and its pissing it down with rain
they take the umbrella away

its all to do with the banks and lending

Cheers Hornblower, thats what I expected pretty much but didn't know if there was any other signs people noticed apart from your points and interest rates etc...

Its not an immediate thing either really I guess so no point comparing time lengths with prior times.

Guess its a good old chart and look for support levels then :cheesy:

 

[wasp]

Cheers Hornblower, thats what I expected pretty much but didn't know if there was any other signs people noticed apart from your points and interest rates etc...

Its not an immediate thing either really I guess so no point comparing time lengths with prior times.

Guess its a good old chart and look for support levels then :cheesy:

It is of course, like anything market related really, in the fact that all we are doing is looking to buy low and sell high, trying to pick those points using a mixture of fundamental and technical analysis to achieve the best possible price and not get in when something is too expensive.

Only fundamentals and support and resistance (demand and supply) truly have the answers.

**** me, if I was any more intelligent, I'd have used this thread as simple example of teaching what it is you are really looking at when reading a chart and how, oh so simple it really is. Plus of course how an indicator can't help or tell you what you can already see.

 

[wasp]

UK House Prices - HousePrices.uk.net useful...

 

[JTrader]

So, it sounds like simply, we all perish till the government steps in, admits we are in dire circumstances and has to make changes to alter direction.

Is this all down to Brown/Darling or have we got to wait for Bush *cough*, yeah right!, I mean Obama/McCain to rectify the US first as we can't seem t do anything without them telling us what to do?

Excuse my ignorance here but I moved to Hong Kong in 1992 and didn't return till 1998 so missed it all.

Why don't we do something now or is it the longer we wait, the lower prices will be meaning life will become easier for first time buyers and house prices/life prices will come back in line again and basically re adjusting the stupid high prices over and beyond the wages non traders were receiving?

The UK and US economies are very closely tied. The US economy typically leads the UK economy by about 6 months according to the news etc.
On teletext i read the other day that the US housing market is currently in its worst state since "The Great Depression" .

The ideal time to buy for a first time buyer is when prices are at the bottom, and interest rates are high, but about to start falling. In the most recent bust-boom-bust cycle, the ideal buying time was 1999-2000, with low interest rates and rising house prices until 2007.

 

[JTrader]

Your looking for a sign
well , when things a getting good ,
the banks are giveing us all an unbrella
when we are haveing problems, and its pissing it down with rain
they take the umbrella away

its all to do with the banks and lending

Exactly.

Recent graduates/students for example, who are in debt are inundated with credit card offers etc. Once you have no debt and a good credit rating, these offers mysteriously/conveniently stop. Therefore its about getting people tied into the debt/creditr system for life, from an early age.

Also, the boom--bust cycle is a win-win situation for the banks (particularly central banks), as they profit from the boom and the bust phases.

 

[JTrader]

Halifax House Price Index

 

[JTrader]

Inflation & interest rates relationship -

David Smith's EconomicsUK.com: Inflation and interest rates

How MPC decisions on interest affect inflation - Times Online

How do interest rates affect the level of inflation?

The inflation rate, the pace at which prices rise, is primarily determined by the overall balance between the economy’s supply of goods and services and demand for them. If total demand rises, this will tend to lead to an increase in inflation as more money chases fewer goods and services, bidding up the price. If demand falls, inflation will tend to drop back.

Movements in interest rates affect overall demand and thus influence the inflation rate.

The Monetary Policy Committee’s main policy tool is the official short-term interest rate (base rate). Other things being equal, a rise in base rates will tend to dampen demand. A fall in rates boosts aggregate (total) demand, and so puts upward pressure on the inflation rate.

What links interest changes and consumer/business behaviour?

Base rate changes can affect consumer and business behaviour through changes in borrowing costs.

A rise in base rates from the Bank usually leads to a rise in the interest rates that commercial banks charge. A fall in base rates tends to lead to a fall in the rates that they charge.

When commercial banks’ rates rise, it becomes costlier for households and businesses to service existing loans or to take on new debt. This cuts the money they have to spend on other things, reducing demand.

What about confidence?

Changes in interest rates can have an important effect on business and consumer confidence. Usually, a rise in rates will reduce confidence, and a cut will lift it. The lower confidence is, the less likely that businesses and consumers will spend. This tends to limit overall demand.

 

[ianp]

Back in the early 90's I was too young to really comprehend the problem and was 12'000 miles away but for those of you who do remember....

What changed and how could you notice the economy coming back on track?

According to Halifax price index the market started dropping in Q4 1989 from what I remember it took 12 to 18 months for the sellers to get real and understand that they were never going to sell there property for anything like they could have done at the 89 peak.

I lived just outside London at the time and i recon the best time to buy would have been around 92-94 as the market had bottomed and if you had cash or credit you could get a good deal, A house that was on the market for 200k in 1990 I picked up for 136k in 1993, as the vendor was broke and just wanted out.

Just like trading you never know the bottom until after its happened, wait for the flat spot when prices have become static and then go bargain hunting.

Ian

 

[chump]

Wasp,
Google up auctioneers. Look back over their auctions for the last 12 months. Compile a % for unsold lots. Monitor that and it should smack you in the face when see it changes for the better...sheer rocketscience hey.

Right now you should (should because I'm not even looking) see a very high rate of unsold lots post auction. In time, when prices via reserves have dropped far enough and costs of finance have also eased, you will see this change. It really is obvious and there is no has it or has it not. That tells you you can go in for what you want without having to worry about any significant downside. Does not mean you may get the very cheapest price ,but IMO it's the place to know you can safely buy.